New heat electrification markets offer European industry a unique opportunity to electrify its process heat, boost its energy efficiency and stay competitive while meeting climate goals. In June 2025, the European Union announced a €1 billion auction platform dedicated solely to industrial heat electrification. This initiative comes at a pivotal moment for Europe’s industrial sector. For many years, Europe’s industrial competitiveness has been undermined by a heavy reliance on imported fossil fuels. In 2023, the European Union imported 58% of its energy, mostly as fossil fuels. This dependence has left manufacturers exposed to the unpredictable swings of global energy markets. The energy crisis of 2022, which saw gas prices soar to unprecedented levels, exposed the vulnerability of the European industry to external shocks. Energy-intensive industries in Europe paid up to five times more for gas than their US counterparts at the peak of the crisis. High energy costs have also reignited concerns about deindustrialization and Europe’s ability to compete with regions like the USA and Asia, where energy is often cheaper or fossil fuels more abundant. The European Commission’s Green Deal, REPowerEU and Clean Industrial Deal initiatives have placed industrial electrification (including of industrial heat) as core to addressing these concerns and defossilizing industry, with this new auction platform serving as a tangible step forwards. This is an important step to increase the current electrification rate of process heat of only 4% and take advantage of the fact that more than 60% of industrial process heat is electrifiable with existing technology and more than 90% with technologies under development. What matters to industrial competitiveness is not only the cost of the inputs for a production process but also the efficiency of that process, as this ultimately determines the cost of production.

Nature 11th July 2025 read more »